Draining the swamp kauri swamp

A long-awaited Supreme Court judgment says rough sawn slabs of indigenous timber and lightly carved logs are not “finished” items and their export is illegal.

The judgment, which differs from the Ministry for Primary Industry’s (MPI) interpretation of the Forests Act, is described as “unfortunate” by the swamp kauri industry which has pushed MPI's application of the Act to its limits.

For the Northland Environmental Protection Society’s Fiona Furrell the victory spells the end of a nine-year battle against government agencies to clamp down on what it has always seen as an illegal trade. It’s been a costly and time-consuming battle she believes the small society should never have needed to take on.

“We’ve had to do it because of the actions of MPI and our regional council.”

The society grew concerned the scant remains of Northland’s wetlands were being drained, dug-over and destroyed by a flurry of excavation cashing in on the lucrative swamp kauri export market. Buyers from around the world had become interested in purchasing the wood which had been preserved in pristine condition in peat swamps for thousands of years.

It’s illegal to export any unfinished indigenous wood other than stumps, however, a clause in the Forests Act was interpreted by the Ministry for Primary Industry in a way which has allowed thousands of cubic metres of swamp kauri with minimal finishing to be shipped offshore.

A finished item is defined in the Forests Act as something “without the need for further machining or other modification”.

Swamp kauri logs were rough sawn into slabs and exported as “rusticated table tops” and exported without legs. Decorations were lightly carved onto whole logs in a way which did minimal damage to the timber underneath. These were shipped to China as “temple poles”.

China's Alibaba website advertises swamp kauri slabs. Prices are set not by table top, but by the cubic metre of wood and range from US$2,500 to 3,000 per cubic metre, with 20 cubic metres set as a minimum order.

With single slabs fetching over $100,000 at times, there’s speculation the swamp kauri trade has been worth hundreds of millions of dollars. Despite this, Northland remains New Zealand’s second poorest region.

At the height of the swamp kauri frenzy large companies like Oravida Kauri (later renamed Kauri Ruakaka) and New Zealand Forests Ltd joined dozens of small operators involved in the enterprise. Swamp kauri was dug out from where it was allowed to be extracted, and at times, places it wasn’t.

Furrell says the damage to Northland’s wetlands from swamp kauri extraction has been devastating. She accuses MPI of “aiding and abetting” the devastation by allowing so much to be exported so easily. For sawmills it was a quick way of making cash, no wood turners or craftspeople were needed to slice up and ship off slabs as “table tops”.

The society dragged MPI, the Customs Department and the Ministry for Culture and Heritage though the courts to close the interpretive loophole which allowed exports of the lightly finished timber, in the hope that cutting off export demand would save wetlands.

After losing in the High Court and Court of Appeal, Furrell is elated the Supreme Court held the same views as the society over what constitutes a finished product even if they did not uphold a second appeal from the society which claimed swamp kauri was covered under the Protected Objects Act.

If it looks like a log, it’s a log

The curious case of the temple poles started in 2010. Emails and documents released under the Official Information Act show Awanui-based Ancient Kauri Kingdom pushed the boundaries with the Ministry for Agriculture and Fisheries (now MPI) to establish the least amount of work it could do to a log and claim it was a finished product.

Initially the company wanted to export whole plain swamp kauri logs to China. These were to be sold to a Chinese trader who said it planned to sell them on to “unknown buyers” for installation in temples.

The exporter maintained the logs were themselves a product in a “final and finished form”. This was rejected by MAF who said plain logs were logs, not a manufactured or finished product. Their response noted: “To all intents this is akin to log export”.

The same company then decided to add carvings to the logs. Internal MAF emails describe the applicant’s activity: “He is determined to test MAF’s interpretation of export controls. He does accept that unmodified swamp kauri are not finished/manufactured. He is now going to test what “manufactured” constitutes.

“[Redacted name] revealed this may be the start of a cycle, where if rejected, he intends to progressively add further carvings to the poles until they meet the definition of a finished product.”

Photographs released through the Official Information Act showed logs carved with turtles, dolphins, octopus, tiki, kiwis and silver ferns. The carvings are of varying quality, however, some poles were deemed to be acceptable for export.

This "temple pole" was considered finished enough for legal export. Photo: Official Information Act

The Supreme Court interpreted the Forests Act as seeking to stop the export of indigenous wood in raw form and requiring value to be added to any product prior to export.

The judges did not agree surface carvings added value to logs and noted: “ … a log cannot be a finished or manufactured indigenous timber product unless the work on it is so extensive that it has lost its identity as a log. Surface carving or decoration, however elaborate, is unlikely to cause such a loss of identity.

“Merely labelling a log a totem or temple pole does not change this.”

It also found slabs of wood are not table tops saying: “The use as a table could not be discerned from the product itself.”

In the judgment it noted MPI’s approach was if the timber in the shape of a table top, even if just a rough-sawn piece of wood without legs, it was a finished table top “if this is its alleged intended purpose”.

What the judgment means

The ruling puts an end to container loads of temple poles and rusticated table tops being exported. Those companies with vast stock piles of swamp kauri will need to add real value to the wood before it can leave the country.

Nelson Parker, who has been in the swamp kauri export industry since 1991, said the judgment was unfortunate. His company has increased its number of employees and machinery to manage demand which at present was mainly coming from overseas.

“We’re in, we’re committed. We can’t jump out. I think it’s in the government’s interests to have the likes of ourselves doing what we are doing.

“Our shipping agents get a cut of the cake, we get a cut of the cake and we get offshore dollars coming into New Zealand. The thing is, what would that log be doing otherwise?”

He believes some of the public concern at the industry comes from misinformation. It’s legal to export an indigenous wood stump in unfinished form.

MPI’s factsheet on the definition of a stump explains it can include the roots below ground, as well as some trunk above ground. The limit of how much trunk is fair game is defined by the maximum diameter of the trunk.

For a tree the size of Tāne Mahuta, its diameter of 5.22 metres would mean 5.22 metres of trunk above ground would be classed as stump and permissible for export in raw form.

“A lot people can’t even imagine a log that is 4 metres in diameter, we’ve got them.”

His company has exported 7.5-metre-long stump slabs as well as stumps, table tops and sculptures. He has never exported a temple pole. Parker expects MPI will be in touch this week to discuss the judgment’s impact on his business.

“We think in our world, if something is not broken why try and fix it? Obviously other people have other agendas.”

Furrell said she planned to take a brief moment to “breathe” following the decision, but her battles were far from over. She said there’s the issue of the Northland Regional Council which “sat on its chuff” while Northland’s wetlands were dug over. Only five percent of the region’s wetlands remain.

“When it comes to the care of our environment, Northland is probably one of the worst places in New Zealand.”

She hopes the judgment may go some way in helping a fight against a Kaimaumau wetlands project.

The Northland Regional Council has granted a resource consent for wax and resin to be extracted from 400 hectares of Kaimaumau wetlands privately owned by Ngāi Takoto. The extraction will remove the peat from the peat swamp. Solvents will be used to extract resin and wax from the peat. It will then be mixed with sand and returned to the wetland in “roughly the same area it was taken from”.

The council’s group manager of regulatory services Colin Dall says the impact of the extraction to the wetlands will be “no more than minor”.

The project which has the support of the council’s economic development arm, Northland Inc is close to a Department of Conservation scientific reserve.

The work will result in Ngāi Takoto's wetlands becoming suitable for other economic activities such as farming and horticulture.

“ ... any kauri logs and stumps excavated during the peat extraction will also be put aside for use by Ngāi Takoto”.

Forest & Bird have challenged the consent and filed a judicial review. The outcome is pending.

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